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The Davis Investment Discipline

At Davis Advisors, we seek to purchase durable, well-managed businesses at value prices and hold them for the long term to allow the power of compounding to work.

The Davis Investment Discipline begins with the premise that stocks represent long-term economic interests in real businesses. With that in mind, our research process begins with two essential questions:

What kind of businesses do we want to own?

How much should we pay for them?

Identifying the Types of Businesses We Want to Own

To answer this question, we try to determine if the businesses possess characteristics that foster creation of value over long periods of time. These characteristics include:

Determining the Price We Should Pay

Once we have identified businesses we want to own, we wait patiently for opportunities to purchase shares at a discount to our estimate of their intrinsic worth. We believe this provides a margin of safety that can enhance our potential return while mitigating risk. Components of our proprietary valuation methodology include: